Liquidation or Winding up a company in Bangladesh | Everything you need to know

This post in will explain in details about the process of Liquidation or winding up a company in Bangladesh – This article will explain the step by step process of winding up a company office in Bangladesh, Declaration of solvency , accounts and audit, extraordinary general meeting, declaration of solvency and everything you need to know and to be aware of.

What is Liquidation or Winding up a Company? And how a Liquidation or winding up works?

Process of Liquidation or Winding up a company in Bangladesh

Voluntary Liquidation or a winding up a company in Bangladesh

A company may be winded up voluntarily:

• when the period, if any, fixed for the duration of the company by the articles expires or any event  occurs for which the articles provides that the company is to be dissolved and the company in general meeting has passed a resolution for winding up voluntarily;
• if the company resolves by special resolution that the company be winded up voluntarily;
• if the company resolves by extraordinary resolution to the effect that it cannot by reason of its liabilities continue its business, and that it is advisable to wind up.

It is to be noted that commencement of voluntary winding up shall be deemed to commence at the time of the passing of the resolution for voluntary winding up. (Liquidation or Winding up a company in Bangladesh)

Company Winding up process subject to Court in Bangladesh

When a company has by special or extraordinary resolution resolved to wind up voluntarily the court may make an order that the voluntary winding up shall continue but subject to supervision of court and such terms as the court thinks just.

Section 242 of the Companies Act 1994 takes into account whether a corporation is found to be unable to pay its debts. This will be the case if a creditor to whom the company is indebted for a sum and the company fails to pay the sum for three weeks or if the execution or other proceedings issued under a decree or order of any court in favor of a company creditor are returned unsatisfied in whole or in part or if it is demonstrated to the court’s satisfaction that the company is unable to pay its debts and the court is to take account of them.

Section 316-321 of the 1994 Companies Act deals with turning up being subject to court oversight. If a company has agreed to wind up voluntarily through special or exceptional means, the court may make an order that the voluntary winding up must proceed but be subject to court oversight and such conditions as the court considers appropriate. Where an order for winding up is made subject to supervision, the liquidator may exercise all the powers, subject to any limitation imposed by the court, as if the company were being wound up voluntarily entirely. (Liquidation or Winding up a company in Bangladesh)

Steps by Step process of voluntary Winding Up a Company in Bangladesh

This is the liquidator ‘s responsibility in any voluntary winding-up to settle the company’s debts and change the creditors’ right among themselves. Here is the comprehensive step-by – step method of voluntary wind-up of a bangladesh company.

Step One: Drafting documents for Winding Up

The first step on the process of winding up is to prepare documents. The documents that need to be prepared are:

1. Declaration of Solvency, (which includes information such as the company has no debts among other things) and
2. Profit and Loss Account and
3. Audited Balance. 

The above mentioned documents will have to be approved by the majority directors of the company.

Step Two: Submission to RJSC

The next step is to file the approved Declaration of Solvency to the RJSC within 5 (five) weeks from the approval by directors.

Step Three: Pass Special Resolution

The third step requires the Extraordinary General Assembly to pass a special resolution. This is to approve the company’s decision to wind down and the liquidator appointment. It should be noted that the meeting ‘s content is also to be filed with the RJSC. The special resolution will then be published in the official Gazette, and in a newspaper circulated in the district where the company’s registered office is located. It will be achieved within 10 ( ten) days of the special resolution passing it.

Step Four: Appointing Liquidator

Once the chosen liquidator has been approved by the extraordinary general meeting and the liquidator has accepted the appointment, such must be notified to the RJSC. In addition, the Deputy Commissioner of Taxes will also be informed of the same within 30 (thirty) days of the said appointment. 

Step Five: Final Report by Liquidator

At this stage the liquidator need to prepare a Final Account. The Final Account must have the details of how the winding up has been conducted and the assets distributed. Thereafter, the liquidator will call an extraordinary general meeting and the notice for that must be circulates by advertisement in the official Gazette, and in a newspaper. Such a notice must be given not less than one month before the meeting.

The special resolution will be passed in the extraordinary general meeting with regards to the disposal of the books and papers of the company. 

Step Six: Documents filing to RJSC

Lastly, a final meeting must be hold and a return of the meeting must be submitted to the RJSC upon which the company will be winded up. The submission must be made within one week of the meeting.

Step Seven: Petition filing to Court for Winding Up

For voluntary winding up, the petition to the court is made at this stage. All the documents relevant to the winding up of the company are submitted to the court. The court being satisfied, declares that the company has been dissolved. This stage is essential to avoid any allegation of fraud later on.  

Government fees for Company Winding Up Process

Here are the minimal required government fees for the company winding up process (Liquidation or Winding up a company in Bangladesh):

1.         For Private and Public Company: BDT 20.00

2.         For Trade Organization and Foreign Company: BDT 10.00

Liquidation or winding up a company in Bangladesh services in TR Barristers in Bangladesh

Tahmidur Rahman | TR Barristers in Bangladesh, a leading Company law firm can provide following the legal services: The Law firm will assist in arranging the actual consent and interest of each company share. Furthermore, TRW will provide a complete road map for winding up processes. Team TRW may also help in the disposal of company properties and make use of the proceeds to pay creditors. In addition , the team will assist in holding creditors’ meetings, settling legal disputes and settling all the company’s pending obligations. TRW will be responsible for sending the documents to RJSC and preparing all documents in Bangladesh for the termination or liquidation of the company. On top, the company law department will provide the complete legal services in relation to Company winding up or Liquidation process in Bangladesh.

For queries or legal assistance, please reach us at:

E-mail: info@trfirm.com
Phone:+8801847220062 or +8801779127165 (WhatsApp also available)

Address: .

Liquidation or Winding up a company in Bangladesh.